Acting SEC Chair Directs Staff to Reconsider Pay Ratio Disclosure Rule
On February 6, the acting Securities and Exchange Commission Chairman, Michael Piwowar, issued a statement soliciting public comment on “unexpected challenges” that issuers have experienced in anticipation of complying with the pay ratio disclosure rule and directing the SEC staff to reconsider the implementation of the rule. The pay ratio disclosure rule, adopted to implement Section 953(b) of the Dodd–Frank Wall Street Reform and Consumer Protection Act, will require each issuer to disclose the ratio of the compensation of its chief executive officer to the median compensation of all of its employees, as discussed on August 7. As currently adopted, this rule will first apply with respect to compensation for the company’s first fiscal year beginning on or after January 1, 2017 (for most companies, their proxy statements for their 2018 annual shareholder meetings). Comments are being solicited for 45 days following the announcement.
This statement by acting Chairman Piwowar follows his prior statement requesting that the SEC reconsider the rule on conflict minerals.
On February 3, the US Senate, following prior approval of the US House of Representatives, also passed a resolution that, with the expected approval of President Trump, will repeal the resource extraction rule. This follows the joint resolution previously filed by Senator Inhofe and Representative Huizenga.
The SEC’s statement is available here.
The joint resolution is available here.